US Federal budget deficit rises in July amid high debt costs
Date
8/13/2024 4:28:36 AM
(MENAFN) The U.S. Treasury Department has reported that the federal government faced a budget deficit of USD244 billion in July, which marks a 10 percent increase compared to the same month last year. This figure is notably higher than the USD221 billion deficit recorded in July 2023 and slightly surpasses the USD242 billion deficit that economists had projected based on a survey. The rise in the deficit reflects the ongoing challenges in balancing the federal budget amid increasing costs and financial pressures.
A significant factor contributing to this larger deficit is the rising cost of servicing the national debt. Interest payments on the debt surged by 21 percent to reach USD89 billion last month. Additionally, the average interest rate on the debt climbed by 49 basis points to 3.33 percent, highlighting a considerable increase in borrowing costs. This surge in debt service costs is straining the federal budget and exacerbating the deficit situation.
Despite the July deficit increase, the total deficit for the first ten months of fiscal year 2024 has decreased by 6 percent to USD1.517 trillion, compared to USD1.614 trillion for the same period in fiscal year 2023. The fiscal year is set to conclude on September 30, and this decline over the ten-month period suggests some progress in reducing the overall deficit, even as monthly figures show significant shortfalls.
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